A photographer could lose most of a $450,000 jury award because he didn’t establish that a business owner willfully infringed his copyrights by hiring a web developer who used unlicensed images, an appeals court ruled.
The U.S. Court of Appeals for the Ninth Circuit April 16 reversed part of a jury verdict in favor of photographer Jim Erickson in his 2013 lawsuit against Kraig Rudinger Kast. Erickson failed to show Kast financially benefited from the infringement or went beyond negligence into willfulness, the appeals court said, remanding those issues to the lower court.
The decision highlights the importance of jury instructions. The Ninth Circuit said the trial judge erred by telling the jury it could find willfulness if it concluded that Kast should have known about the infringement. The jury had awarded Erickson maximum statutory damages of $150,000 per infringed work based on that finding. Without willfulness, statutory damages peak at $30,000 per work.
The damages amount could fall substantially on remand if the trial court fails to find Kast was “willfully blind,” acted with “reckless disregard,” or actually knew of the infringement.
The Ninth Circuit affirmed the jury’s finding that Kast “knew or had reason to know” about the infringement, as he hired the developer to build a site for his company, Atherton Trust. But that standard, though it can establish contributory infringement, is insufficient to show willful infringement, the court said.
Kast hired Only Websites to revamp Atherton Trust’s website in 2010, and identified Wells Fargo Private Bank as a competitor whose website he wanted to mimic, according to the opinion.
Three photos on the Wells Fargo site, licensed by Erickson, ended up on Atherton Trust’s revamped website, the court said. Kast admitted knowing about the photos as of January 2011, but didn’t remove them until receiving a cease-and-desist letter six months later, the court said. Kast blamed Only Websites for the copying and said he made multiple unsuccessful requests to replace the photos.
Erickson argued that Kast was liable for vicarious infringement, which requires showing unlicensed use and “direct financial benefit.” He said the images drew people to Kast’s site and that the infringement let him “rush” its launch while avoiding licensing fees.
But Erickson failed to establish that the images caused anyone to visit the site or to buy anything, the court said. Only the direct infringer, Only Websites, could financially benefit from avoiding fees, and any savings passed from Only Websites to Kast would be indirect, the court said. It ruled Kast didn’t vicariously infringe as a matter of law, and didn’t send that question back to the trial court.
The court also rejected Erickson’s argument that the record supported a willfulness finding regardless of jury instructions. Kast’s contract with Only Websites “suggests that Kast reasonably believed” he only had responsibility to ensure rights to photos he submitted, not ones Only Websites procured, the court said. The ruling said Kast acquired licenses for other photos he contributed, indicating a lack of recklessness. But it declined to rule for Kast on willfulness.
Judge Michael Daly Hawkins wrote the opinion, joined by Judges Sidney R. Thomas and M. Margaret McKeown.
Orrick Herrington & Sutcliffe LLP represented Kast. The McCulloch Law Firm, PLLC represented Erickson.
The case is Erickson Prods., Inc. v. Kast, 2019 BL 134449, 9th Cir., No. 15-16801, 4/16/19